September 18, 2019 / 9:47 AM / a month ago

Bosnia's central bank increases charge on banks' surplus reserves

SARAJEVO, Sept 18 (Reuters) - Bosnia’s central bank has increased the rate it charges commercial banks to hold their excess reserves, lowering its negative interest rate to minus 0.5% from minus 0.4%, in line with the rate charged for deposits by the European Central Bank, the bank said on Wednesday.

The rate is charged on deposits that exceed the reserves banks are obliged to hold, in accordance with a bank policy introduced in May that adjusts the rate in accordance with the ECB’s rate.

The bank said it has not changed the 10% rate charged on obligatory reserves.

The bank introduced a negative interest rate on excess reserves in 2016 to boost lending by Bosnia’s mainly foreign-owned banks. Those banks had cut lending, saying there was a shortage of good projects to support with loans. (Reporting by Daria Sito-Sucic; editing by Larry King)

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